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Business letters: Small firms don’t understand the banks

THERE were factual errors and a fundamental misunderstanding of the Enterprise Finance Guarantee (EFG) scheme in last week's report "Banks let 120 small businesses go under every day".

It also implied that Barclays, among other banks, is failing to support small business through the scheme - a position we utterly reject.

The scheme is working, and nearly half of the EFG loans have been offered by Barclays. We are agreeing such loans worth more than £1m a day.

What's little known is that the scheme is not designed to help all businesses - it is for that group (5%-10%) that are higher risk and could not get a loan under normal circumstances.

We cannot be cavalier about such lending simply because it is backed by both the taxpayer and the banks. These are funds that can, and should, come with specific restrictions to safeguard the public purse, as well as the banks'